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When all you have is a hammer...

The Fed has a twin mandate (price stability, maximum employment) and two tools to satisfy it with: rate adjustments and liquidity injection (QE). That's just about it. They aren't allowed or configured to do much of anything else.

If those two tools stop working or produce distorted results, they can't switch tools. They have to keep banging the hammer or choose to do nothing.

What we are seeing here is a failure of Congress and the Presidency, not the Fed. The Fed is doing the only thing it can possibly do in this situation. It has no more tools.

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Traditionally, the two tools were rate adjustments and setting the reserve ratio.

Traditionally, the RR was never touched. The last adjustment was in in 1992, when it was lowered from 12 to 10%.

Nowadays, QE has become an even more important tool than rate setting, which is mind boggling to me. I worked at the Fed when Greenspan passed the baton to Bernanke, and while I understood that Bernanke was an expert at what to do when rates approach zero, I'm still stunned by the rapid shift.

Completely agree. The Fed is one of the few institutions that has bipartisan support so its allowed to fulfil its mandate and the 'plumbing' so to speak works well when its trying to pump money into markets. But as we've seen getting money into people's pockets is more challenging in the USA as that bit of infrastructure wasn't seen as needing investment due to the way USA normally reacts to market shocks. (And by infrastructure I think of benefit systems running 50 year old bits of cobol, sending benefit payments via cheques, patchworks of state benefits instead of universal coverage etc.)

Nonsense. Money isn't getting into people's pockets because the political will isn't there. If it was an influential Bloc screaming for assistance, they would get it, and the details would be worked out later. Where there's a will there's a way, and where there's no will there are a bunch of phony excuses.

If the people protesting the lockdowns instead protested to demand immediate, and sustained benefits, and supporting policy, until the lockdowns are lifted under we may see different results. Of course, for that to work the protests must end entirely if demands are met.

Instead we get more reality TV. I keep going to bed every night wondering when I'll wake up from bassackwards nightmare.

I feel like a lot of Americans won't ask for help because they fear it will mean that others who are not just like them might also get help, and that quite a bit of it boils down to latent (and even assumed and subconscious) racism.

I wouldn't have said this 10 years ago. 10 years ago I thought racism was dead except for a few crackpots and maybe a few rural areas. The seemingly out of nowhere explosion of it in otherwise more contemporary settings on the Internet prove this is wrong and it's still very much alive. I don't think it ever died. It just became something you don't talk about in polite settings or in mainstream media. All it took was a few Youtube blowhards and trolls to challenge the taboo and it was back with a vengeance.

Other than racism the rest is self-righteousness: "I'm responsible and hard working, so sure I could deserve help, but what about those people over there? If they're in trouble they must be lazy or stupid."

I've got a bit more hope in the median American than you I think. I don't expect racism to disappear entirely. It's an extension of a natural reaction to change or experience. It takes education, and good experiences to counter racism. Some people are just stupid, but even they aren't beyond help. Those who are should be imprisoned.

Anyways, if you care to know, I suspect that people etal have merely forgotten how much power to effect change we have when we unite towards a common goal. If every person claiming unemployment started protesting tomorrow for: [weekly stimulus money no delays no excuses, 100% free to consumer health care and treatment extended into single payer after covid19, and policies preventing repossession, evictions, foreclosures, and garnishment due to un/under-employment] then I would bet everything I own that you would see our politicians act with a swift decisiveness, to either effect a nationwide tianemin square or capitulate to the will of the people. I fully expect capitulation, but realize we have an absentee president.

Agreed. I should have included political will as part of the infrastructure. I was highlighting how the Fed is geared in such a way that makes it very difficult for it to automatically deliver support to anything other than large institutions/finance etc given the patchy nature of US benefit systems. If political class deemed it necessary it would exist but they don’t so it doesn't.

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